Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
ISS discourages approval of union-backed outside director nominee for KB Financial board
The headquarters of KB Financial Group located on Yeouido, Seoul / Courtesy of KB Financial Group
By Anna J. Park
By Anna J. Park
The Institutional Shareholder Services (ISS), one of the global major proxy advisory firms, advised KB Financial Group shareholders to vote against the nomination of an outside director recommended by the group's union at the financial giant's shareholders' meeting scheduled for March 25.
“We recommend to a vote against director nominee Kim Young-su, as the union came short of building a compelling case to justify the addition of their proposed nominee to the board,” the ISS' latest report on proxy analysis and benchmark policy voting recommendation of KB Financial stated.
In February, KB Financial's labor union recommended Kim, former Export-Import Bank of Korea (Eximbank) Vice President, to become one of the group's outside directors.
“Nominee Kim has built his career expertise on overseas investment for over three decades, since starting to work at the Eximbank in 1985, assuming various key positions, including at the bank's Hong Kong subsidiary as well as international finance divisions,” the labor union's recommendation read.
Yet, the U.S.-based proxy advisory firm pointed out in its report that despite the union's recommendation that Kim's overseas expertise would bring about a valuable change in the board, Kim's core strength seems to be in the realm of the banking business.
The report went on to criticize Kim's banking business acumen as a common attribute shared by other outside directors or director nominees, while it is doubtful whether Kim's expertise would contribute to enhancing the financial group's extensive overseas business that runs the gamut of various financial products and assets.
Founded in 1985, ISS has been publishing reports on corporate governance, responsible investment solutions and shareholder meeting agendas. More than 70 percent of global institutional investors are known to refer to ISS' reports prior to exercising their shareholders' rights.
Compared to 0.55 percent stake of the group's shares owned by the labor union, foreign investors hold over 72.3 percent of KB Financial's shares. ISS had previously published negative views on outside director nominees recommended by the labor union throughout 2017 to 2020, and the nominees were not approved at the shareholders' meeting.